Abstract
In this paper, we examine the labor market recovery from the COVID-19 recession and test for effects of termination of pandemic unemployment insurance programs among 15–24-year-olds. We use data from the January 2016–October 2022 Current Population Survey. Using regression-based methods, we show that while 15–19-year-olds experienced a brisk, full recovery in labor market outcomes from the COVID-19 recession, the recovery was sluggish and incomplete among 20–24-year-olds, with some work outcomes lagging below pre-pandemic norms well into 2022. Termination of pandemic UI programs led to increased work hours and full-time employment among 20–24-year-olds but did not have these effects among 15–19-year-olds.
Summary statistics.
| Age group | 15–19 | 20–24 | ||||
|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | |
| All | Before | After | All | Before | After | |
| Age | 16.92 | 16.92 | 16.92 | 21.68 | 21.70 | 21.65 |
| Female | 0.49 | 0.49 | 0.49 | 0.45 | 0.45 | 0.46 |
| Black | 0.15 | 0.15 | 0.15 | 0.16 | 0.16 | 0.16 |
| Other race | 0.11 | 0.11 | 0.12 | 0.10 | 0.10 | 0.10 |
| Hispanic | 0.23 | 0.22 | 0.24 | 0.21 | 0.21 | 0.22 |
| In central city | 0.25 | 0.25 | 0.25 | 0.30 | 0.30 | 0.29 |
| Outside central city | 0.48 | 0.48 | 0.48 | 0.44 | 0.44 | 0.44 |
| Hours, all occupations | 6.11 | 5.94 | 6.38 | 21.09 | 21.49 | 20.45 |
| –Food preparation and serving | 1.54 | 1.48 | 1.63 | 2.76 | 3.00 | 2.37 |
| –Sales and related | 1.20 | 1.23 | 1.17 | 2.99 | 3.13 | 2.78 |
| –Other occupations | 3.37 | 3.24 | 3.57 | 15.34 | 15.37 | 15.29 |
| Employment rate | 0.25 | 0.25 | 0.25 | 0.61 | 0.63 | 0.58 |
| Work full-time | 0.06 | 0.06 | 0.07 | 0.36 | 0.36 | 0.35 |
| Work part-time | 0.19 | 0.19 | 0.19 | 0.25 | 0.26 | 0.24 |
| School attendance | 0.60 | 0.61 | 0.59 | 0.41 | 0.42 | 0.39 |
| Obs | 560,397 | 368,450 | 191,947 | 360,175 | 237,084 | 123,091 |
-
Data come from the CPS 2016 Jan-2022 Oct, with 2016 Jan-2020 Feb being the before-pandemic time period, and 2020 Mar-2022 Oct being the after-pandemic time period.
Full-time and part-time status by school attendance.
| Month | April of 2016–2019 | July of 2016–2019 | ||
|---|---|---|---|---|
| Age group | 15–19 | 20–24 | 15–19 | 20–24 |
| (1) | (2) | (3) | (4) | |
| April in school | 67% | 46% | 68% | 46% |
| Full-time status | 5% | 34% | 9% | 41% |
| Part-time status | 18% | 28% | 21% | 25% |
| Full-time|April in school | 2% | 10% | 9% | 26% |
| Part-time|April in school | 21% | 37% | 25% | 33% |
| Full-time|April out school | 11% | 54% | 10% | 53% |
| Part-time|April out school | 12% | 21% | 11% | 18% |
| Obs | 29,687 | 19,606 | 6147 | 3810 |
-
The statistics for July are based on a subsample who are observed in April of the same year.
Effects of the pandemic on other age groups.
| Usual work hours | ||||||
|---|---|---|---|---|---|---|
| Childless, no college degree | All | |||||
| 25–54 | 55–64 | 65–74 | 25–54 | 55–64 | 65–74 | |
| (1) | (2) | (3) | (4) | (5) | (6) | |
| Year 2020 | −3.52*** | −1.58*** | −0.83*** | −2.64*** | −1.77*** | −0.87*** |
| (0.44) | (0.29) | (0.16) | (0.31) | (0.23) | (0.14) | |
| Year 2021 | −2.53*** | −1.39*** | −0.61*** | −1.77*** | −1.06*** | −0.78*** |
| (0.28) | (0.24) | (0.16) | (0.14) | (0.13) | (0.14) | |
| Year 2022 | −2.16*** | −0.84** | −0.49 | −1.19*** | −0.59** | −0.63** |
| (0.31) | (0.41) | (0.30) | (0.17) | (0.23) | (0.27) | |
| UIExpiration | 1.24*** | 0.31 | 0.12 | 0.70*** | 0.36* | 0.27 |
| (0.25) | (0.27) | (0.22) | (0.13) | (0.18) | (0.20) | |
| Y2020 = Y2021 | 0.03 | 0.55 | 0.22 | 0.01 | 0.01 | 0.56 |
| Y2020 = Y2022 | 0.01 | 0.15 | 0.33 | 0.00 | 0.00 | 0.46 |
| Y2021 = Y2022 | 0.05 | 0.08 | 0.60 | 0.00 | 0.01 | 0.49 |
| Obs | 909,854 | 629,445 | 565,765 | 3,253,047 | 1,255,804 | 1,019,358 |
| Pre-pandemic mean | 29.26 | 21.96 | 7.21 | 32.75 | 25.35 | 9.03 |
-
***p < 0.01, **p < 0.05, *p < 0.1. Table presents estimates of βs from Eq. (3). Year 2020 is a 0–1 indicator for Mar 2020–Dec 2020. Year 2021 is a 0–1 indicator for the entire year of 2021. Year 2022 is a 0–1 indicator for Jan 2022–Oct 2022. The last three rows report the T-test for equality of the estimated coefficients for two years.
Effect of the pandemic on usual work hours in food preparation and serving occupations. Figure shows estimated coefficients and 95% CIs on month indicators in Eq. (1).
Effect of the pandemic on usual work hours in sales and related occupations. Figure shows estimated coefficients and 95% CIs on month indicators in Eq. (1).
Effect of the pandemic on usual work hours in other occupations (not food preparation and serving or sales and related). Figure shows estimated coefficients and 95% CIs on month indicators in Eq. (1).
Effect of the pandemic on full-time employment. Figure shows estimated coefficients and 95% CIs on month indicators in Eq. (1).
Effect of the pandemic on part-time employment. Figure shows estimated coefficients and 95% CIs on month indicators in Eq. (1).
References
Aaronson, S., and F. Alba. 2020. The Unemployment Impacts of COVID-19: Lessons from the Great Recession. brookings.edu (accessed September 9, 2021).Search in Google Scholar
Alon, T. M., M. Doepke, J. Rumsey-Olmstead, and M. Tertilt. 2020. “The Impact of COVID-19 on Gender Equality.” In NBER Working Paper 26947. Also Available at: http://www.nber.org/papers/w26947.10.3386/w26947Search in Google Scholar
Alon, T. M., S. Coskun, M. Doepke, D. Koll, and M. Tertlit. 2021. “From Mancession to Shecession: Women’s Employment in Regular and Pandemic Recessions.” In NBER Macroeconomics Annual, Vol. 36, edited by M. Eichenbaum, and E. Hurst. Chicago, IL: University of Chicago Press Series: Macroeconomics Annual.10.3386/w28632Search in Google Scholar
Altonji, J., Z. Contractor, L. Finamor, R. Haygood, I. Lindenlaub, C. Meghir, C. O’Dea, D. Scott, L. Wang, and E. Washington. 2020. Employment Effects of Unemployment Insurance Generosity during the Pandemic. https://tobin.yale.edu/sites/default/files/files/C-19%20Articles/CARES-UI_identification_vF%281%29.pdf (accessed December 19, 2022).Search in Google Scholar
Baker, S. R., R. A. Farroknhia, S. Meyer, M. Pagel, and C. Yannelis. 2020. “How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic.” Review of Asset Pricing Studies 10 (4): 834–62.10.1093/rapstu/raaa009Search in Google Scholar
Bartik, A. W., M. Bertrand, F. Lin, J. Rothstein, and M. Unrath. 2020. “Measuring the Labor Market at the Onset of the COVID-19 Crisis.” Brookings Papers on Economic Activity 2020 (2): 239–68. https://doi.org/10.1353/eca.2020.0010.Search in Google Scholar
Borjas, G. J., and H. Cassidy. 2020. “The Adverse Effect of the COVID-19 Labor Market Shock on Immigrant Employment.” In NBER Working Paper 27243.10.3386/w27243Search in Google Scholar
Bureau of Economic Analysis (BEA) 2021. How Will the Expansion of Unemployment Benefits in Response to the COVID-19 Pandemic Be Recorded in the NIPAS? https://www.bea.gov/help/faq/1415 (accessed October 9, 2021).Search in Google Scholar
Center on Budget and Policy Priorities (CBPP). 2022. Chart Book: Tracking the Recovery from the Pandemic Recession. https://www.cbpp.org/research/economy/tracking-the-recovery-from-the-pandemic-recession (accessed December 19, 2022).Search in Google Scholar
Congressional Research Service. 2021. States Opting Out of COVID-19 Unemployment Insurance (UI) Agreements IN11679. Last updated August 20, 2021.Search in Google Scholar
Coombs, K., A. Dube, C. Jahnke, R. Kluender, S. Naidu, and M. Stepner. 2021. “Early Withdrawal of Pandemic Unemployment Insurance: Effects on Earnings, Employment, and Consumption.” In Working Paper.10.1257/pandp.20221009Search in Google Scholar
Dube, A. 2021. Early Withdrawal of Pandemic UI: Impact on Job Finding in July Using Current Population Survey. https://arindube.com/blog-posts/ (accessed September 9, 2021).Search in Google Scholar
Falk, G., P. D. Romero, J. A. Carter, I. A. Nicchitta, and E. C. Nyhof. 2021. “Unemployment Rates during the COVID-19 Pandemic.” In Congressional Research Service Report 46554. https://crsreports.congress.gov/ (accessed December 19, 2022).Search in Google Scholar
Finamor, L., and D. Scott. 2021. “Labor Market Trends and Unemployment Insurance Generosity during the Pandemic.” Economics Letters 199: 109722, https://doi.org/10.1016/j.econlet.2020.109722.Search in Google Scholar
Flood, S., M. King, R. Rodgers, R. Ruggles, J. R. Warren, and M. Westberry. 2022. Integrated Public Use Microdata Series, Current Population Survey: Version 10.0 [Dataset]. Minneapolis: IPUMS.Search in Google Scholar
Forsythe, E. 2021. “Why Don’t Firms Hire Young Workers during Recessions?” The Economic Journal 132: 1765–89. https://doi.org/10.1093/ej/ueab096.Search in Google Scholar
Ganong, P., F. Greig, M. Liebeskind, P. Noel, D. M. Sullivan, and J. Vavra. 2021a. “Spending and Job Search Impacts of Expanded Unemployment Benefits: Evidence from Administrative Micro Data.” In Becker Friedman Institute for Economics Working Paper 2021-19.10.3386/w30315Search in Google Scholar
Ganong, P., F. Greig, P. Noel, D. M. Sullivan, and J. Vavra. 2021b. “Micro and Macro Disincentive Effects of Expanded Unemployment Benefits.” In Working Paper.Search in Google Scholar
Glatt, J., and P. Wunnava. 2018. “Help Not Wanted: The Dismal Science of Youth Unemployment’s Scarring Effect.” iBusiness 10: 51–84. https://doi.org/10.4236/ib.2018.102004.Search in Google Scholar
Goda Shah, G., E. Jackson, L. H. Nicholas, and S. S. Stith. 2023. “The Impact of COVID-19 on Older Workers’ Employment and Social Security Spillovers.” Journal of Population Economics. 36 (2): 813–46.10.1007/s00148-022-00915-zSearch in Google Scholar
Gopinath, G. 2020. “Limiting the Economic Fallout of the Coronavirus with Large Targeted Policies.” In Mitigating the COVID-19 Crisis – Act Fast and Do Whatever it Takes, edited by R. Baldwin, and B. Weder di Mauro, 41–7. London: CEPR Press (Centre for Economic Policy Research).Search in Google Scholar
Handwerker, E. W., P. B. Meyer, and J. Piacentini. 2020. “Employment Recovery in the Wake of the COVID-19 Recession.” In US Bureau of Labor Statistics Monthly Labor Review. https://www.bls.gov/opub/mlr/2020/article/employment-recovery.htm (accessed December 19, 2022).10.21916/mlr.2020.27Search in Google Scholar
Holzer, H. J., R. G. Hubbard, and M. R. Strain. 2021. “Did Pandemic Unemployment Benefits Reduce Employment? Evidence from Early State-Level Expirations in June 2021.” In NBER Working Paper 29575.10.3386/w29575Search in Google Scholar
Hoynes, H., D. L. Miller, and J. Schaller. 2012. “Who Suffers during Recessions?” The Journal of Economic Perspectives 26 (3): 27–48. https://doi.org/10.1257/jep.26.3.27.Search in Google Scholar
Kalenkoski, C. M., and S. W. Pabilonia. 2012. “Time to Work or Time to Play: The Effect of Student Employment on Homework, Sleep, and Screen Time.” Labour Economics 19: 211–21. https://doi.org/10.1016/j.labeco.2011.10.002.Search in Google Scholar
Kochhar, R., and A. Barroso. 2020. Young Workers Likely to Be Hard Hit as COVID-19 Strikes a Blow to Restaurants and Other Service Sector Jobs. Pew Research Center. https://www.pewresearch.org/fact-tank/2020/03/27/young-workers-likely-to-be-hard-hit-as-COVID-19 -strikes-a-blow-to-restaurants-and-other-service-sector-jobs/ (accessed September 9, 2021).Search in Google Scholar
Lee, S. Y., M. Park, and Y. Shin. 2021. “Hit Harder, Recover Slower? Unequal Employment Effects of the COVID-19 Shock.” Federal Reserve Bank of St. Louis Review 103 (4): 367–83.10.20955/r.103.367-83Search in Google Scholar
Leos-Urbel, J. 2014. “What Is a Summer Job Worth? The Impact of Summer Youth Employment on Academic Outcomes.” Journal of Policy Analysis and Management 33 (4): 891–911. https://doi.org/10.1002/pam.21780.Search in Google Scholar
Levitz, E. 2021. 5 Explanations for April’s Bad Jobs Report. https://nymag.com/intelligencer/2021/05/jobs-report-explained-ui-childcare-seasonal-adjustment.html (accessed October 9, 2021).Search in Google Scholar
Marinescu, I., D. Skandalis, and D. Zhao. 2021. “The Impact of the Federal Pandemic Unemployment Compensation on Job Search and Vacancy Creation.” Journal of Public Economics 200 (C): 104471, https://doi.org/10.1016/j.jpubeco.2021.104471.Search in Google Scholar
Mishory, J., and A. Stettner. 2020. Unemployment Insurance and Young People in the Wake of COVID-19. The Century Foundation. tcf.org (accessed December 19, 2022).Search in Google Scholar
New York State Department of Labor (NYS DOL). 2021. Coronavirus Aid, Relief, and Economoc Security (CARES) Act. https://dol.ny.gov/coronavirus-aid-relief-and-economic-security-cares-act (accessed December 19, 2022).Search in Google Scholar
Oreopoulos, P., T. von Wachter, and A. Heisz. 2012. “The Short- and Long-Term Career Effects of Graduating in a Recession.” Academy of Entrepreneurship Journal: Applied Economics 4 (1): 1–29. https://doi.org/10.1257/app.4.1.1.Search in Google Scholar
Petrosky-Nadeau, N., and R. G. Valletta. 2021. “UI Generosity and Job Acceptance: Effects of the 2020 CARES Act.” In Federal Reserve Bank of San Francisco Working Paper 2021-13.10.2139/ssrn.3870185Search in Google Scholar
Rothstein, D. S. 2007. “High School Employment and Youths’ Academic Achievement.” Journal of Human Resources 42 (1): 194–213. https://doi.org/10.3368/jhr.xlii.1.194.Search in Google Scholar
Santarosa, R. 2013. Long-term Consequences of Youth Unemployment. US Chamber of Commerce Foundation. https://www.uschamberfoundation.org/blog/post/long-term-consequences-youth-unemployment/34032 (accessed December 19, 2022).Search in Google Scholar
Tyler, J. H. 2003. “Using State Child Labor Laws to Identify the Effect of School‐Year Work on High School Achievement.” Journal of Labor Economics 21 (2): 381–408. https://doi.org/10.1086/345562.Search in Google Scholar
Ward, J. M., and K. A. Edwards. 2021. “CPS Nonresponse during the COVID-19 Pandemic: Explanations, Extent and Effect.” Labour Economics 72: 1020–60.10.1016/j.labeco.2021.102060Search in Google Scholar
© 2023 Walter de Gruyter GmbH, Berlin/Boston
